mRNA decapping is a central step in eukaryotic mRNA decay that simultaneously shuts down translation initiation and activates mRNA degradation. A major complex responsible for decapping consists of the decapping enzyme Dcp2 in association with decapping enhancers. An important question is how the activity and accumulation of Dcp2 are regulated at the cellular level to ensure the specificity and fidelity of the Dcp2 decapping complex. Here, we show that human Dcp2 levels and activity are controlled by a competition between decapping complex assembly and Dcp2 degradation. This is mediated by a regulatory domain in the Dcp2 C terminus, which, on the one hand, promotes Dcp2 activation via decapping complex formation mediated by the decapping enhancer Hedls and, on the other hand, targets Dcp2 for ubiquitin-mediated proteasomal degradation in the absence of Hedls association. This competition between Dcp2 activation and degradation restricts the accumulation and activity of uncomplexed Dcp2, which may be important for preventing uncontrolled decapping or for regulating Dcp2 levels and activity according to cellular needs.